Will Commission-based Pay Corrupt Your Techs?

I participated in a panel discussion on pricing at Mechanical Systems Week – HVAC Comfortech 2012. The topic of incentive-based or commission-based pay came up. As usual, some people felt the need to stand up and proclaim that incentive-based pay could turn honest techs into dishonest techs. This caused me to go into a rant.

I don’t want to hear any more self-righteous talk about how everyone but you would be corrupted by incentive-based pay.

People are either honest or they’re dishonest. I really don’t believe that money has a lot to do with it.

I know people, both in the business and outside of the business, who, if there were an honest way to do something and a dishonest way to do something, will choose the dishonest way.

You don’t need money to turn people into liars. I’ve seen techs who were being paid a low hourly rate and such a pitifully low commission that all it did was raise their annual income just high enough to put them in a higher tax bracket, lie to people about dead compressors and so on. They’re lying when there’s essentially no benefit to it. Why? Because they’re liars. There is a condition known as being a “compulsive liar.”

You’re On Incentive-based Pay All one- and two-man shops are strictly incentive-based pay. You sell something, you pay your bills, and you split the profits. BAM! Whether you consider it to be so or not, you’re both working straight commission. If you own a company and you’re still running calls, you’re basically working on commission. Has it corrupted you? No? Then why are you so certain it will corrupt everyone else?

A Look Inside My Relative’s Company I have a family member who opened an HVAC shop a few miles away from me. His techs are paid a small flat rate to run a call and a percentage of the service invoice or replacement sale.

I do all the recruiting and personally hand-picked nearly all of his techs. (He sneaked a couple of them in on me when I wasn’t looking.) We need more techs and have the trucks ready for them, but a company is only as good as its technicians, and I hire only the best. Over the last four years I have accumulated a stack of resumes nearly a foot tall. It’s almost impossible to get a live interview with me. Once you get interviewed, it’s almost impossible to get hired, because we will check on you We check your blood, your driver’s license, do a nation-wide criminal background check, we call your previous employers and your references, and search you out on the Internet in general and Facebook in particular. If we feel even the slightest bit unsure of you, you’re out. Good people do not, and will not, want to work with dirtbags.

There are a few companies in our area that, if you’ve ever worked there for more than one day, we won’t even talk to you because every single one of their employees are liars and thieves. We’ve hired techs who’ve worked for these companies before because they said they changed their ways. No, they didn’t.

One of these guys attended one of my 4-Day Schools and showed potential. He wanted to come to work for us, but we turned him down. We even told him it was because we don’t hire anyone who ever worked at that company for more than one day. He explained that he only worked there because he had to eat and pay his bills. My family member almost caved in and hired him, then I asked him, “When you started your company with just you and a bunch of credit cards, with a four-month old son, and a load of bills, how many people did you lie to just to put food on the table?”

When he answered, “None,” that pretty much ended the debate. We didn’t hire him.

A Leopard Can’t Change Its Spots I got very few turndowns on additional recommended items when I was running service. Customers aren’t supposed to doubt you. Two out of every three of the calls I ran resulted in a blower pull-and-clean, which leads to all kinds of additional tasks, such as indoor coil cleaning or replacement, UV lights, duct sealing, and upgraded filtration. Therefore, if two out of every three calls that you run don’t result in you at least quoting a blower pull-and-clean, I don’t believe you’re performing a complete inspection, which is our trademark in the area.

One of the things I do for my family member is conduct morning service tech meetings where I look over their “Paper Towel Closes” (bit.ly/QHajpc) and invoices from the previous day and select certain ones for the tech to tell us all about the call.

One of our techs at the time was one of these guys who’d worked for a “questionable” company who said he wanted to work with us because we were ethical. We took him at his word and gave him a shot at working at a good company. One of his Paper Towel Closes listed a blower pull-and-clean, and they turned him down on it.

I asked the same thing I usually asked when someone gets turned down on a task. I asked, “Did the blower need to be pulled and cleaned?”

Believe it or don’t, he actually said, “No.” We let him go immediately following the meeting.

The point is that honest people are honest and dishonest people are dishonest. A leopard can’t change its spots.

It’s all in the hiring. Hire honest people and your company will have a culture of honesty.

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